Those results come two weeks to the day after Keith Judd, a convicted felon incarcerated in Texas, won 41 percent of the vote against Obama in the West Virginia primary.
There is more here.
Political Science
Getting lawmakers in the seat of a self-driving Prius has become Google’s M.O., according to Matthew Newton, editor of DriverlessCarHQ.com, a site dedicated to covering autonomous cars. “Google has been giving free rides to policymakers in California, Nevada and Florida,” Newton told Wired from his home base in Melbourne, Australia. “So it makes sense that they would do it in D.C.”
Eric Cantor, for one, was given a ride.
There is much in the review, excerpt:
In their narrow focus on inclusive institutions, however, the authors ignore or dismiss other factors. I mentioned earlier the effects of an area’s being landlocked or of environmental damage, factors that they don’t discuss. Even within the focus on institutions, the concentration specifically on inclusive institutions causes the authors to give inadequate accounts of the ways that natural resources can be a curse. True, the book provides anecdotes of the resource curse (Sierra Leone cursed by diamonds), and of how the curse was successfully avoided (in Botswana). But the book doesn’t explain which resources especially lend themselves to the curse (diamonds yes, iron no) and why. Nor does the book show how some big resource producers like the US and Australia avoid the curse (they are democracies whose economies depend on much else besides resource exports), nor which other resource-dependent countries besides Sierra Leone and Botswana respectively succumbed to or overcame the curse. The chapter on reversal of fortune surprisingly doesn’t mention the authors’ own interesting findings about how the degree of reversal depends on prior wealth and on health threats to Europeans.
Do read the whole review (that is not just the usual cliched command to do so), and I will gladly link to any response by Acemoglu and Robinson. Here is Diamond’s bottom line:
My overall assessment of the authors’ argument is that inclusive institutions, while not the overwhelming determinant of prosperity that they claim, are an important factor. Perhaps they provide 50 percent of the explanation for national differences in prosperity. That’s enough to establish such institutions as one of the major forces in the modern world. Why Nations Fail offers an excellent way for any interested reader to learn about them and their consequences. Whereas most writing by academic economists is incomprehensible to the lay public, Acemoglu and Robinson have written this book so that it can be understood and enjoyed by all of us who aren’t economists.
More than half of all police officers in Greece voted for pro-Nazi party Chrysi Avgi’ (Golden Dawn) in the elections of May 6. This is the disconcerting result of an analysis carried out by the authoritative newspaper To Vima (TheTribune) in several constituencies in Athens, where 5,000 police officers in service in the Greek capital also cast their ballot.
Here is more, via Chris F. Masse.
And yet I think they are wise:
Take the the following quote from Karl Whelan, professor of economics at UCD. It is a prime example. The fragment used by Sinn Féin is in italics.
“All that said, although I think the economics of this treaty are pretty terrible, on balance, the arguments favour Ireland’s signing up to it.”
Similarly Colm McCarthy, also of UCD and one of the most influential of the economic rock stars, was quoted by Sinn Féin as saying the following: “As an exercise in addressing the euro zone’s twin banking and sovereign debt crisis, the fiscal compact makes no worthwhile contribution”. But in the same article – and overlooked by Sinn Féin – he states: “If there has to be a referendum, the electorate would be well advised to swallow hard and vote Yes, notwithstanding the inadequacies of the proposed treaty.”
The story is here.
Why wise? Under one reading, Ireland needs to stake out its alliance with the European Union at all costs, and let other nations be the ones to strike down bad treaties and silly ideas. Under another reading, Ireland should to some extent defect, but they will get the best “defection deal” if they wait until Greece, Italy, and Spain are to some extent settled. Both mean voting “yes” on the treaty referendum, even though the arguments for the treaty are weak.
Paul Krugman’s post on the topic was revealing, compared especially to the analytic and rhetorical flourish which he applies to criticizing austerity. You can’t fault his IQ or his knowledge of the situation, there simply isn’t much convincing to put forward. Here is Ryan Avent, in a good post but I think it also fails to put forward a workable solution:
What, then, are the alternatives to austerity? Well, first up would be an integration that would help break the diabolical loop now gutting the periphery. Creating a euro-zone-wide safe asset and a euro-zone-wide set of institutions to stand behind damaged banks would help accomplish that. America doesn’t expect Delaware to shoulder the costs of failures of banks headquartered in Delaware. That’s an important contributor to the stability of the American federal system. The euro-zone must recognise that it is the failure to build appropriate euro-zone-wide institutions—equal in scope to the considerations and resources of the central bank—that is contributing to soaring yields around the periphery and creating the illusion of the need for dramatic austerity in places that could do without it.
I call this the “Germany pays for everything and accepts all the risk of moral hazard” approach. Potential German liabilities could run in the trillions of euros and the “ball and chain” lasts forever. I know all about Connecticut and Mississippi, but without a common electorate, not to mention a common national identity, I don’t see how this is possible. Keep in mind that Eurozone-wide deposit insurance in essence serves as an implicit guarantee to the parent national governments as well, for Modigliani-Miller-like reasons.
It is like doing African development policy by suggesting that America send one-third of its gross national product to Mozambique. Maybe it is moral to do so (though I doubt that), but in any case it is not really a policy proposal. Lack of a common identity is a constraint, not a policy choice, except at fairly small margins or at moments of extraordinary cultural transformation (hint: this is not one of them [video], especially when there are seventeen nations involved).
Just to (imperfectly) integrate the relatively small unit of East Germany cost West Germany almost $2 trillion dollars.
By the way, will the periphery nations give much (any?) control over their finances to Germany? Clearly not, and thus we are back to the idea being dead as a doornail.
There is no common fiscal policy without a common electorate, not for long at least.
Ryan Avent also supports looser monetary policy for the eurozone, as do I. It’s worth trying. But keep in mind, the further along is a financial crisis, the more emergency monetary policy takes on a more purely redistributive element. You end up having to stick the money somewhere quite specific and forget about ever getting it back. Nominal reflation helps with some problems when done well in advance of crunch time, but right now it is a question of solvency for many of the parties involved. It’s already ineffective for the ECB to be doing three-year loans to rotten banks at one percent, against very low value collateral, how much more of a boost are we to expect?
Just how much monetary policy needs to be done? At this point, we’re not talking about a move from price stability to say four percent eurozone inflation (which I would nonetheless favor, and favored all the more a year or two ago), rather much more would be required. We’re running up against the same constraints which prevent the de facto Eurobonds from taking off. Revisit the well-known point that in a financial crisis fiscal and monetary policy blur together, and we return to the notion that solutions are based on massive cross-border redistribution. On top of all that, arguably the deflationary pressures in Greece, and possibly Spain, are already past the point of control from the ECB side, given the ongoing collapse in private lending.
Here is my earlier post, Austerity as a substitute for trust. Kevin Drum adds related comment.
Exceeding all expectations, Paul Romer convinced the Honduran government to authorize a charter city. Now Romer is encouraging Canada to export its institutions. Here is Romer and Octavio Sanchez, chief of staff to the President of Honduras, writing in Canada’s most important newspaper, The Globe and Mail:
http://www.crossed-flag-pins.com
With the near unanimous support of its Congress, Honduras recently defined a new legal entity: la Región Especial de Desarrollo. A RED is an independent reform zone intended to offer jobs and safety to families who lack a good alternative; officials in the RED will be able to partner with foreign governments in critical areas such as policing, jurisprudence and transparency. By participating, Canada can lead an innovative approach to development assistance, an approach that tackles the primary roadblock to prosperity in the developing world: weak governance.
…According to Gallup, the number of adults worldwide who would move permanently to Canada if given the chance is about 45 million. Although Canada can’t accommodate everyone who’d like to move here, it can help to bring stronger governance to many new places that could accept millions of new residents. The RED in Honduras is the place to start.
…By participating in RED governance, Canada can make the new city a more attractive place for would-be residents and investors.
…The courts in the RED will be independent from those in the rest of Honduras. The Mauritian Supreme Court [!, AT] has agreed in principle to serve as a court of final appeal for the RED, but Canada can play a strong complementary role. Because the RED can appoint judges from foreign jurisdictions, Canadian justices could hear RED cases from Canada and help train local jurists.
Oversight, policing and jurisprudence are just a few of the ways in which Canada can help.
…The world does not need more aid. As the Gallup numbers show, it needs more Canada – more of the norms and know-how that lead to the rule of law, true inclusion and real opportunity for all.
Paul Romer is on an incredible run.
Mr Hollande says that he will replace austerity with growth. Why didn’t anybody think of that before?
…If building great roads and trains were the route to lasting prosperity, Greece and Spain would be booming. The past 30 years have seen a huge splurge in infrastructure spending, often funded by the EU. The Athens metro is excellent. The AVE fast-trains in Spain are a marvel. But this kind of spending has done very little to change the fundamental problems that now plague both Greece and Spain – in particular, youth unemployment.
Worse, in some ways, EU funding for infrastructure has created problems. In Greece, milking the EU for subsidies became an industry in itself: and political connections were a surer route to wealth than entrepreneurial flair.
…Even in France, the centre of the revolt against austerity, it is hard to argue that the problem is that the state is not doing enough. This is a country where the state already consumes 56 per cent of gross domestic product, which has not balanced a budget since the mid-1970s, and which has some of the highest taxes in the world.
Mr Hollande, who is not an idiot, knows all this. That is why, behind all the feel-good rhetoric about ending austerity, the small print is less exciting. In fact, all the Socialist candidate is promising to do is to take a year longer than President Nicolas Sarkozy to balance France’s budget. In Europe, even the left cannot pretend that deficit-spending can continue for ever. So they are reduced to arguing that governments are cutting, “too far and too fast”, in the words of Ed Balls, Britain’s shadow chancellor. This is small-scale quibbling – masquerading as a major doctrinal dispute.
Do read the whole thing.
1. Their governments have been obsessed with protecting insider interests for decades.
2. They use “make work” jobs as macroeconomic automatic stabilizers. A “pro growth” plan would eliminate these jobs, but of course in the short run and possibly medium run too, that would lower the rate of growth for Keynesian reasons. They are stuck.
3. There does not exist any coherent, workable, political incentive-compatible plan whereby these governments borrow more, spend more, and “invest for growth.”
4. There does not exist any coherent plan whereby Germany invests in the periphery at a level which will boost growth.
5. Their governments are in various stages of “clinging to power,” and that makes true pro-growth policies, and tackling major interest groups, more difficult.
6. As Angus has pointed out, “they’re tired of austerity” really means something more like “they want a greater backstop from the Germans.” Of course they do.
7. A boost to AD will not bring them back to where they were five years ago or anything close. Their competitiveness has been revealed to be weaker, their institutions have been revealed to be weaker, EU institutions have been revealed to be weaker, their financial systems have been revealed to be weaker, and there is the possibility of macroeconomic multiple equilibria with no flip switch to get back to where they were. AD is obviously a problem, but the notion that this is a nearly exclusively AD-based phenomenon is an idea which is held by many academics and bloggers but hardly anyone in those countries themselves.
8. Probably he was joking, but in this post Paul Krugman seems to suggest that France needs higher taxes.
That is today’s NYT symposium, here is my short piece — “Democracy is having its say” — and links to the pieces of others. My opening sentence is this:
Today, very few countries in the euro zone are capable of making credible commitments or binding agreements with the others.
I am still predicting that it will end badly. It already has ended badly, in fact. And the “better than expected” scenario is not easy to see, much less bring about.
Through Interfluidity, where else? Here is one bit:
Consider NGDP targeting. Under this policy rule, Treasury securities would become risk assets, whose real return would be geared to the health of the economy. (NGDP path targeting implies that shortfalls in real growth must be matched by increases in inflation.) Treasuries become low-beta index funds, diversified claims on the real production. Nominal yields would be more stable, but the real value of a future payment becomes as uncertain and volatile as the business cycle.
Read the whole thing. In American politics, old people usually get their way. In Western Europe, those governments have been obsessed with protecting insider interests for decades and they are not suddenly swept up with an enthusiasm for free market economics. The problem isn’t “the Austerians”; do you really think that Pete Boettke is in charge?
I have an essay in that book co-authored with Veronique de Rugy. Other contributors include Paul Krugman, Robin Wells, Michael Lewis, David Graeber, Peter Diamond, Emmanuel Saez, Ariel Dorfman, Barbara Ehrenreich, Jeff Sachs, and Nouriel Roubini, among others.
Our essay is an…outlier…in the volume. Here is one bit:
Wall Street has contributed to some very real problems, but the core issues for poor Americans are often health care, education, and the cost of renting an apartment of buying a house. The best way to improve living standards and increase options for future success is to move toward greater competition and accountability in each of those areas, areas that usually have little to do with the financial sector per se.
Our goal is to propose an alternative vision for what OWS should focus on. You can buy the book here.
As Tyler Cowen reports in a fantastic article in The American Interest called “What Export-Oriented America Means,” American exports are surging.
Here is much more, read the whole thing. Here is one more bit:
A rift is opening up. The first, globalized sector is producing a lot of the productivity gains, but it is not producing a lot of the jobs. The second more protected sector is producing more jobs, but not as many productivity gains. The hypercompetitive globalized economy generates enormous profits, while the second, less tradable economy is where more Americans actually live.
Via Kevin Lewis, here is Aaron Shaw and Yochai Benkler:
American Behavioral Scientist, April 2012, Pages 459-487
Abstract:
In this article, the authors compare the practices of discursive production among top U.S. political blogs on the left and right during summer 2008. An examination of the top 155 political blogs reveals significant cross-ideological variations along several dimensions. Notably, the authors find evidence of an association between ideological affiliation and the technologies, institutions, and practices of participation. Blogs on the left adopt different, and more participatory, technical platforms, comprise significantly fewer sole-authored sites, include user blogs, maintain more fluid boundaries between secondary and primary content, include longer narrative and discussion posts, and (among the top half of the blogs in the sample) more often use blogs as platforms for mobilization. The findings suggest that the attenuation of the news producer-consumer dichotomy is more pronounced on the left wing of the political blogosphere than on the right. The practices of the left are more consistent with the prediction that the networked public sphere offers new pathways for discursive participation by a wider array of individuals, whereas the practices of the right suggest that a small group of elites may retain more exclusive agenda-setting authority online. The cross-ideological divergence in the findings illustrates that the Internet can be adopted equally to undermine or to replicate the traditional distinction between the production and consumption of political information. The authors conclude that these findings have significant implications for the study of prosumption and for the mechanisms by which the networked public sphere may or may not alter democratic participation relative to the mass mediated public sphere.
Daniel Klein has a new paper, with Davis, Figgins, and Hedengren:
A sample of 299 U.S. economics professors responded to our 2010 survey, which asked: “Suppose you are reading or listening to an economist, and he discloses his own ideological proclivities. Which best represents your attitude toward his doing so:” The results surprised us. Sixty-three percent of respondents chose “I welcome it,” twenty percent chose “I am indifferent,” and only ten percent chose “I dislike it.” Most economists, it appears, welcome ideological openness, and only a small minority dislikes it. Follow-up questions asked reasons why the respondent liked (or disliked) it. These results suggest that economists – or, at least those inclined to complete a survey – are quite inclined toward natural discourse.
I suppose this is good news for the future of the economics blogosphere. Or do economists just say that they welcome this openness, without really meaning it?
